The Financial Adviser Standards and Ethics Authority (FASEA) has been urged by the SMSF Association to provide more guidance and certainty to financial advisers on the recognition of prior learning.
SMSF Association Head of Policy Jordan George said it is essential that advisers have greater clarity on how their existing qualifications will be counted under the new standards being proposed by FASEA.
“Currently, the proposed FASEA education standards for existing advisers do not provide enough recognition for prior learning,” said Mr George.
“A more meaningful recognition of advisers’ prior education should help them in the transition to the new regime with less cost and effort while maintaining the high standards that must be achieved to ensure consumer trust.”
The SMSF Association is also “concerned” that accountants operating under limited licenses have not been given adequate consideration as part of the education pathways framework.
“The limited license regime is a legislated part of the regulatory framework and therefore cannot be ignored,” says the SMSFA, in its submission.
“The proposed existing adviser pathways may force advisers who only provide SMSF advice to spend considerable time and money studying subjects that are not relevant to the advice they provide.”
“We believe the education and standards that accountants with a limited license must undertake should adequately represent the work they conduct on a day-to-day basis. Depending on how FASEA determines a related degree, which is difficult to currently understand with the lack of detail known, this is a considerable risk.”
The Association also “strongly” – in the words of Jordan George – recommended in its submission to FASEA that financial advisers should be required to have specialised SMSF education if they wish to advise on SMSFs.
The submission says: “The SMSFA has always advocated for specialised SMSF financial advice and recent findings from the Productivity Commission, the Australian Securities and Investments Commission (ASIC) and case studies from the Royal Commission have reinforced this view. In regards to ASIC, their recent publishing of ASIC Reports 575 and 576 on SMSF advice and member experiences saw the regulator specifically call for specialist SMSF advice education requirements to be introduced to raise the standard of SMSF advice.”
“It would be unfortunate for new advisers to be able to reach a required FASEA threshold to give financial advice and then be able to give specific SMSF advice without specific SMSF knowledge being part of the required learning outcomes”
Jordan George said the proposed FASEA pathway for new entrants to the industry was “too rigid and may starve the industry of future advisers”, with the Association instead recommending “greater flexibility for new entrants to undertake university study and still be able to enter the financial advice profession”.